Conferences
Guiding Educational Efforts through Farmers’ Grain Marketing Price-Risk Decisions
Nate Bruce
Summary
Agricultural price volatility significantly impacts farmers' earnings, highlighting the need for effective marketing instruments in grain sales. Evidence suggests limited use of futures markets among grain farmers in Delaware and Maryland compared to higher adoption in southern states like Kentucky. This project aimed to understand grain farmers’ interests and involvement in risk management strategies to inform targeted educational outreach.
Survey results gathered between July and November 2024 reveal diverse levels of risk tolerance among farmers, with this correlating with their choice of marketing tools. Risk-averse farmers favor forward contracts, while moderately risk-tolerant farmers are more likely to use futures and options contracts. Crop insurance coverage also influences marketing decisions; farmers with 75% coverage adopt a balanced approach, utilizing spot sales (18.52%), forward contracts (24.07%), and futures contracts (20.37%). Farmers identifying price volatility as their primary concern were more inclined to use forward and hedge-to-arrive contracts.
These findings offer critical insights for educational outreach to enhance farmers’ adoption of risk management strategies. Risk-averse farmers can benefit from educational efforts focused on the mechanics and advantages of forward contracts, while moderately risk-tolerant individuals might gain from training on futures and options contracts, coupled with practical simulations that further explain these tools. Moreover, integrating crop insurance education with various grain marketing instruments can help farmers see how these tools complement one another to reduce financial uncertainty. Finally, outreach programs should address farmers’ specific concerns about price volatility, with tailored materials and hands-on guidance on forward and hedge-to-arrive contracts, which align with these concerns.
Details
| Conference | 2025 Extension Risk Management Education National Conference |
| Presentation Type | 30-minute Concurrent |